PURCHASING PROCEDURES - University of Central Lancashire

20: NEGOTIATION BRIEFING NOTES
Why negotiate
As we are spending taxpayers money, we are publicly accountable and must ensure
that value for money is obtained. Negotiation is one method of achieving this. Also
savings made enable budget holders to gain more from typically decreasing budgets.
When conducted with integrity and professionalism negotiation is a perfectly logical
step in the procurement process. It must be carefully planned and managed so that
confidence and trust in the purchaser (which in the longer term translates into better
value for money) are always retained. Suppliers who realise that their customer always
wishes to negotiate will invariably add a little on to their price to compensate.
Conducting a basic negotiation
A negotiation strategy should be developed prior to the negotiations taking place.
Analysing information, identifying objectives, formulating a strategy and ensuring that
you are authorised to conduct the proposed negotiations will help you to negotiate
from a position of strength and achieve an effective result. Ensure you differentiate
from facts and assumptions.
1. Pre-Meeting Strategy Development
When creating your strategy consider all potential items for negotiation and ways
in which the University‟s needs may be met. Consider also the current market
trends and the suppliers current and future business situation e.g. seasonal
variations, current financial standing and market strategies. Analyse the faults of
suppliers products, even if they are unimportant to the purchaser, getting the
supplier to identify / confirm weaknesses can put the balance of power on your
side. Considering many options will allow you to change tack during negotiations if
necessary.
1a. What to negotiate
Price (except in EU contracts)
supply and cost of spare parts
earlier delivery/completion dates
warranties/guarantees/maintenance/repair/after sales service
compensation for failure to meet specified requirements.
quantity/educational discounts. This list is not exhaustive, it is a concept of
purchasing that “everything is negotiable”.
2. Meeting - Introduction
Home „turf‟ is always useful, familiarity with environment and information to hand
offers a position of strength from which to conduct proceedings. The meeting
should commence with an introduction, giving background information and gently
leading up to points to discuss. Allow suppliers time to talk, you can pick up useful
information prior to negotiating.
Purchasing Procedures December 2011